Fun With Data – It’s Getting Expensive
No this is not about inflation, although it is certainly a topic for discussion in the CE space; Its about the cost of producing semiconductors, actually the cost of building semiconductor capacity, a topic near and dear to those who have been told by foundries that they are ‘in-line to see actual product in about 6 to 9 months’. Foundries, both mature and newer nodes, have been running at near or full capacity for much of this year and plans for capacity expansions and greenfield fabs are making headlines as fears that consumers will not be able to purchase all of the items they want during the holiday season and beyond.
Taiwan based Trendforce published data estimating the cost of building a 300mm 50,000 unit/month fab that shows how expensive it has become to build such facilities, even those at more mature nodes, and how this continues to narrow the number of companies that have access to such capital. The top 5 wafer foundries accounted for 27% of global semiconductor investment in the 1997 – 1998 period, with that increasing to 58% by 2008, while the current top 5 now account for 72% of that spending. While there was considerable focus on 5nm and smaller node development before this year, the capacity constraints felt by foundries has pushed that focus to more mature nodes where the bulk of commercial and industrial semiconductors are produced.
Not only is the cost of building semiconductor fabs increasing but the cost of designing the IC is also quite sensitive to the process node needed. The design cost increase for ICs at mature node levels is between 32% and 37% for each incremental node, but once 16nm is reached that increment increases from 51.2% to 82.1% at 5nm, with ~50% of the cost being EDA tools, making it considerably more expensive and therefore difficult for smaller IC design houses to develop leading edge products, again shifting that development to companies large enough to support such development projects.
Taiwan based Trendforce published data estimating the cost of building a 300mm 50,000 unit/month fab that shows how expensive it has become to build such facilities, even those at more mature nodes, and how this continues to narrow the number of companies that have access to such capital. The top 5 wafer foundries accounted for 27% of global semiconductor investment in the 1997 – 1998 period, with that increasing to 58% by 2008, while the current top 5 now account for 72% of that spending. While there was considerable focus on 5nm and smaller node development before this year, the capacity constraints felt by foundries has pushed that focus to more mature nodes where the bulk of commercial and industrial semiconductors are produced.
Not only is the cost of building semiconductor fabs increasing but the cost of designing the IC is also quite sensitive to the process node needed. The design cost increase for ICs at mature node levels is between 32% and 37% for each incremental node, but once 16nm is reached that increment increases from 51.2% to 82.1% at 5nm, with ~50% of the cost being EDA tools, making it considerably more expensive and therefore difficult for smaller IC design houses to develop leading edge products, again shifting that development to companies large enough to support such development projects.
Semiconductor Fab Cost By Node - Source: Trendforce
IC Design Cost By Node - Source: IBS
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